What Expenses Can I Deduct As A 1099 Contractor?
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If you're a freelancer, 1099 contractor, or entrepreneur then you are eligible to claim tax write-offs that salaried employees don't get access to. Tell us what you do for work, and explore your deductions below.
If you are an independent contractor, you should be taking advantage of deducting any costs of running your business from your taxable income.
Managing a business has a lot of costs, and if you don’t report those on your taxes, it’ll eat into your profits. Instead, you should start tracking your business expenses so you can deduct them from your tax bill.
The most common question we get at Keeper is, “what expenses can I deduct as a 1099 contractor?”
Use this article as a resource for your deductions to your 1099-MISC tax bill.
Expenses you can deduct as a 1099 contractor can vary from professions and fields of work. It would be beneficial to look into some of the specific deductions you can take for your line of work. We offer a ton of tax guides for writers, construction workers, oil contractors, photographers, Uber drivers, etc.
Here are the 12 most common write-offs you can make as a 1099 contractor that you can’t afford to miss!
A meal qualifies as a business expense write off when you are traveling for business, a meeting to discuss business, a sales pitch, or entertaining a client.
It HAS to be business-related in order to meet the requirement as a taxable expense.
Don’t go overboard and try to deduct all of your meals as a business expense. You can actually only deduct 50% of the meal's cost if you keep your receipts.
Sounds pretty sweet...right?
Here’s our more detailed guide to business meal deductions.
If you drive your car for business, you can deduct some of the costs from your taxes.
It should be noted that there are two categories of deductions that you can choose to use: actual expense or standard mileage. I’ll give you a quick breakdown of what these mean.
Actual expenses are things like:
Standard mileage, on the other hand, can only deduct the mileage at the standard rate provided by the IRS. The 2019 rate was $0.58.
If you choose actual expenses, you cannot deduct mileage. If your business requires you to drive a lot, go the mileage deduction route. If you don’t have to drive that much, the actual expenses may be your best choice. Simply select the option that would give you the biggest tax deduction.
Check out our in-depth guide on writing off car expenses.
If there is a space in your home that you only use for business, you can deduct it from your taxes. The area could be a place where you work out of or home office, a storage zone, or anything else business-related
Although it may seem tricky, the IRS has a really simple way of calculating home office spaces Therefore all you have to do is bring out your measuring tape to estimate the square footage of your home office space.
Here’s an example of what I mean...
If you have a home office that is 150 square feet, you can get a $750 tax deduction. BOOM! Easy peasy.
It should be noted that your home office can only be deducted if it is your primary place of business. If you only partially work out of the space, it does not count as a deduction.
If you travel for business, there are a whole lot of deductions you can make to your tax bill. Remember, travel expenses must be business-related.
Here is a list of travel expenses you can possibly deduct from your tax bill if it is for business:
Essentially, travel expenses are the regular and necessary expenses of traveling away from home for your business. You can't expect to deduct expenses that are for personal purposes or extraordinarily extravagant (I’m lookin’ at you bottle service…).
Look at our guide for business travel deductions for more information.
You can deduct your internet and phone bills from your tax bill but not entirely. Let me explain. If you have wifi or landline at home that you use for business, you can only deduct the expenses according to the time that you used it for business purposes. So, the percentage of use. We advise you to keep a nice record of when you use your phone for business calls.
If you are unsure of your percentage, it is much better to underestimate it. Why? Because if you say you use your home telephone as 80% for business use, you could possibly set off some red flags with the IRS and get audited.
When you have your own business, it is vitally crucial to be investing in maintaining or improving your skills. If you don’t…your business could be toast. There is a list of IRS qualified education expenses.
You can write off educational expenses such as classes, textbooks, tuition, newspaper subscriptions, events related to your profession.
Everything you write off, however, has to be ordinary and related to your business. If you are a writer, you cannot deduct karate classes from your tax bill. It wouldn’t make sense.
Check out our guide to educational tax deductions for more of a detailed breakdown.
As a 1099 contractor, you are probably going to have some supplies and materials that are necessary for you to run your business. The general rule here for supplies and materials is that you can deduct the amount in that calendar year.
Office supplies like pens, post-its, and paper clips are fully deductible regardless of how much you used. If you are a kitchen remodeler, you can deduct your tools or supplies needed to complete your tasks. If you need something to complete the job, then it’s deductible.
All advertising costs are generally fully tax-deductible. The cost of advertising yourself, services, or products would be considered an advertising cost. Here’s what I mean.
The cost of printing flyers, business cards, running Google advertising, Facebook ads, and trade show promotions are all tax-deductible. It should be noted that you can deduct the cost of any freelancers or PR agencies you use to help with your advertising.
The IRS allows you to deduct parking expenses. If you regularly pay for parking fees for your independent contract work, those fees can easily add up. The client shouldn’t include parking reimbursement on any 1099-MISC filed and you cannot write it off as a deduction if you are paid back for the expense. You cannot write off a parking ticket as well.
If you need freelance copywriters, graphic designers, or any type of independent contractor to assist your business, you can write off the contract labor from your taxes. Those payments are deductible.
If you paid out a contractor $600 or more over the course of the year, you will also have to file Form 1099-MISC for them.
Business start-up costs are defined as creating an active trade or business or investigating the creation or buying of an active trade or business. If you are a business starting out, you can deduct up to $5,000 of your business startup costs along with $5,000 of organizational costs. Organizational costs are simply the costs in forming a corporation, partnership, or limited liability company (sole proprietorship is excluded).
Business start-up costs can cover market research, planning, advertising, and even the cost of hiring a business mentor, consultant, or coach.
If you want a tool to automatically find and track all of your expenses, click here to get started.
Photoshop, Microsoft Office, Adobe Creative Cloud - whatever you use for your craft.
Website hosting fees, plugins, stock photos, and themes are tax deductible!
A new computer, cell phone, keyboard, printer, monitor, mouse, it all counts!
Notebooks, sketchpads, pens, pencils, paper, stencils, paperclips galore!
Whether you pay rent or own your home, a portion of those expenses are tax deductible.
It'd be hard to work in an office without running water, huh? You water bill counts.
Gotta keep the lights on in your home office! A portion of your electricity bill counts.
Whether rental or homeowner insurance, you can write off a portion as part of home office.
Your comcast bill is a tax write off. You need internet to do your job!
A desk, chairs, lamps, and other home office necessities are all tax write offs.
If you are self-employed, you can write off your medical and dental insurance coverage.
When you're traveling for work, all meals are tax deductible. Even takeout.
When you travel for work, lodging expenses such as hotel rooms or Airbnb are write offs.
Planes, trains and automobiles are all work travel costs that can be written off.
Gas is expensive! A portion of your gas station fill ups are tax deductible.
Oil changes, repairs, and regular checkups are all tax deductible if you drive for work.
Car insurance, roadside assistance, registration costs, etc. are all tax deductible.
Parking for a meeting downtown or other work trip is tax deductible!
A toll while driving to or from a work destination is tax deductible!
If you discuss work with a coworker, client, or even a friend, it's a write off!
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Conferences and classes that help you keep up with the industry are tax deductible.
Business cards & brochures are a marketing costs that can fully written off on taxes.
If you've had to set up an LLC or have other legal fees for work, that's tax deductible.
Commissions you pay to other agents or employees are fully deductible business expenses.
If you're with a national franchise or an independent broker, desk fees are deductible.
Registration fees and materials for courses like BOLD or GREL are tax deductible.
Online and newspaper ads, photography, staging, and signage are all tax deductible.
Office-related purchases like stationery, photocopies, and monitors are tax deductible.
Your state license renewal, MLS dues, and professional memberships, are deductible.
General business, as well as Errors and Omissions (E&O), insurance are tax deductible!
Lead generation software, like CRM or marketing automation software, is tax deductible.
To deliver a great experience to your passengers, you need to keep a clean car!
Good tunes in your car is part of delivering a great experience to your passengers!
Water bottles, gum & other goodies help help a great experience to your passengers.
Floor mats keep the car clean & passengers happy (and prevent weekly car cleanings!)
If you're still paying down your car, you can claim those expenses against your work!
If you drive you own vehicle, you can write off the annual depreciation of it's value!
If you use your phone for work (who doesn't?) then it's partially deductible.
If you've bought extra chargers to juice in parallel, those are tax deductible!
If you charge at home, part of your monthly electricity bill is tax deductible.
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Equipment that helps you do pickups and handle the scooters is tax deductible.
If you charge your scooters in the garage, then you can claim home office tax deduction!
Sponsored search placements on Amazon, Etsy, etc are deductible advertising expenses!
Costs for email services like Mailchimp are a tax deductible marketing expense.
Every dollar you spend on Facebook Ads, Google Adwords, etc. is a tax deductible expense!
Online seller platforms take an arm and a leg on every sale. You can deduct those costs!
Sell hand-embroidered t-shirts? The cloth, labels and sewing machine are deductible!
If you employ people that help your business, that's tax deductible!
Any inventory costs from product that have been sold are tax deductible!
Online courses, summits, membership site subscriptions, workshops, etc are tax deductible!
The 2.75% (give or take) fee that you pay your payment processors ads up. It's deductible!
Cameras, video camera, lenses, lighting, tripods, used for work are all tax deductible!
Postage, dropshipping fees, and packaging materials are all tax deductible!
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If you're lucky enough to be able to afford designers or researchers, it's deductible!
Your monthly phone bills are expensive! Good thing the cost is partially deductible.
If you write about ancient Greece and buy an urn, it's deductible! (and weird)
Poop bags, as well as the little dispensers, are tax deductible work expenses!
Dog walking requires... a lot of walking! If bought walking shoes, it's deductible!
Dogs need to be walked rain or shine! Rain gear bought for the job is deductible.
If you buy extra treats for the dogs you walk, you can write that off on your taxes!
Tennis balls, and other toys you buy for the dogs you walk are tax deductible!
If you've had to buy extra leashes or harnesses, those purchases are tax deductible!
If you bike to get to and from your dog walking clients, it and repairs are deductible.
Public transportation expenses to / from your dog walking clients are deductible!
If you use a credit card to purchase business goods, you can write off the interest!
Grabbing fresh sheets, towels, or even just toilet paper for your guests can be deducted!
Write off anything related to keeping your rental space safe and cozy!
Treating your guests pays off! Write off that bottle of wine or house breakfast.
The percentage AirBNB takes for every guest? Don't worry you'll get it back in write offs!
When your income comes from renting part of your house, write off the mortgage interest!
Cleaning up doesn't sound so bad after you know you can deduct it from your taxes!
Storage to handle heavy digital files (business related) such as Dropbox or a hard drive.
Any clothing or beauty products used to review or just look your best for content.
Live webcasting apps or creative apps that help you look flawless and reach your audience.
Anything you order to show off your personal brand: Tshirts, stickers, mugs, etc.
If you want to reward your followers with a prize or giveaway, go ahead and write it off!
Write off any software you use for video and photo editing or content creation.
If you need to hire an editor, designer, or set assistance to help you, write it off!
Videocameras, mics, tripods, lenses, anything used to create content, you can write off.
If you are a fitness vlog, write off all those mats, weights, and other equipment used!
Focused on food or cooking? Write off all the supplies needed to produce your video.
Audition tapes, portfolios, business cards. Write off anything used to promote yourself.
Deduct any commision that the agency hiring you takes from every shoot or show.
Make up, hair treatments, or beauty supplies used for work are partially deductible!
Any expense from a modeling coach or other relevant training can be written off.
Your regular dues to participate in a union in your field can be written off.
Word and other editing software are 100% necessary for your job, write it off!
Pay to be a member of any writers organizations? Write off that annual fee.
Write off any books that help you manage your business or that are relevant to your field!
If PayPal or another payment method charged a fee for buying your book, write it off!
Seeing a show or performance counts as research, study up and write it off.
If an agent is helping you find gigs, deduct their fees from your next taxes.
That's right, Netflix is also a write-off! Films are considered research for your job.
Write off beauty supplies or treatments if they were related to a performance.
As long as it is not considered suitable for "streetwear" it can be written off!
Props you use to make class more exciting and easy to understand are deductible!
Rewards systems, which are created for our students, are very much tax write-offs.
ESL companies require teachers to have a decorated classroom which is our home office.
If you work for a delivery app service and they charge commission, write it off.
Required to wear a delivery app's merchandise? Write-off the shirts and bags!
